HINES -- A deer leaps past the snow-dusted lumber mill, decommissioned years ago. Hay bales stored inside are an empty replacement for the hundreds of jobs the structure once held.

This remote expanse of southeast Oregon, now in the spotlight for a long anti-government standoff, was one of the most prosperous pockets of the state just 40 years ago. No place earned more money per resident in 1973 than Harney County.

All of that changed within a generation. The decline of the timber industry felled the mill, then the regional economy. Timber supported a third of the county's employment base in the 1970s. It now accounts for virtually none.

At the recession's height in 2009, unemployment hit 17 percent, the second highest rate in the state. Two-thirds of the county's children qualified for free and reduced lunch prices in 2012. Young people who leave for college often never return. Today, Harney County is one of the few in Oregon whose population is shrinking.

"It was actually a pretty exciting little town when the mills were going," said Ty Morris, who has lived in the small town of Burns for 32 years, most of his life. He now cuts hair and rents a chair at a barber shop on the county seat's North Broadway Avenue.

"The mills went out," he said, "and Burns died."

The county's long economic slide helps explain the bitterness that fuels sympathy with the causes espoused by militants at the Malheur National Wildlife Refuge, if not their tactics.

Desert ranching is one of few industries an environment as harsh as Harney County's has been able to sustain, and many residents say federal overreach threatens the future of this fragile bright spot.

Yet Harney County makes a paradoxical stage for activists seeking to limit the federal government's role in land management.

Nearly half of the county's jobs -- 45 percent -- are on public payrolls. No other county in 2013 derived a greater share of wages from the government than Harney County, said Josh Lehner, an economist who has researched rural Oregon for his job at the Oregon Office of Economic Analysis.

The federal government's role is particularly large. It accounts for 12 percent of jobs but 20 percent of all wages earned outside of farms.

"If you take federal away, you might as well finish making us a ghost town," said Jan Cupernall, of Burns, who sits on the local historical society board.

The decline

The community's hard feelings toward government are rooted in four decades of economic upheaval, which many blame on changing federal regulations that limited timber harvests.

Oregon Office of Economic Analysis officials say lumberyards and logging in the Malheur National Forest, which straddles the county's northern boundary, supported nearly 800 jobs in 1978. Hundreds of people worked at the Edward Hines Lumber Co., a lumberyard so vital to Harney County that the nearest town was named after it.

A buzzing local business sector grew around the timber industry. Big-name retailers such as JCPenney and Sears competed for customers, Cupernall said. The county's per capita income consistently ranked among the highest statewide in the 1970s.

"So much was driven by the mill, and they made good salaries," said Marjorie Thelen, a writer and researcher who retired east of Burns seven years ago.

The timber industry's decline began in the 1980s and continued into the 1990s when new federal policies limited harvests and increased conservation measures statewide.

Harney County suffered multiple blows as the industry withered. The first, and likely largest, came when the original owner of the Hines mill exited the business in the early 1980s. No employer ever ramped back up to the number of jobs lost from the initial shock, said Karen Nitz, an archivist at the county library based in Burns.

Businesses that relied on mill workers or orders also vanished. The last holdout in the county's timber industry, Louisiana Pacific, shuttered in 2008.

Then months later in the midst of the nation's financial crisis, RV maker Monaco Coach filed for bankruptcy, closed its fiberglass parts factory and laid off 100 people in the already-hurting community. It was one of the region's last heavy industrial employers.

Brenda Pointere, who has worked at Wagner's Furniture in Burns for 18 years, said the store's sales of furniture, appliances, carpeting and vinyl fell by half during the year Monaco and Louisiana Pacific closed their doors.

"It was devastating," Pointere said. "You could have thrown a rock down mainstreet and not hit anybody."

"It wasn't something you recuperated from in one year."

A struggle to recover

Civic leaders have tried for years to diversify Harney County's employment base and increase the number of high-paying jobs, but have had little success.

Harney County income

Mark Friesen/The Oregonian

Source: U.S. Bureau of Economic Analysis

Randy Fulton, the county's current economic development director, is optimistic about a planned meat processing facility and small-diameter sawmill that together could provide at least 50 jobs, with the possibility of many more.

But the county's remote location makes it difficult to sway new businesses to come, even to a large enterprise zone that offers tax breaks.

"If you were to ask me the biggest impediment to development in this area, it's geographic," said Bill Burstow, who held Fulton's job from 2002 until 2007. "That makes it very difficult. We're a long way from nowhere."

Burstow and his successors focused their efforts on growing small businesses. Lacking other opportunities, jobless locals often hang out a sign and sell goods and services to farmers, government workers and tourists.

"Everybody else hangs on by the hair of their chinny chin chin," said Paul Clements, of Burns, who started Inkling Sign Designs after his mill job disappeared.

"You don't have a lot of income where people just buy extravagant things," Clements said. "Walmart would not survive here."

Kirby Letham, a real estate broker with Paramore Real Estate in downtown Burns, moved his family to Harney County in August 2012. The real estate market has improved, he said, but there remains little business for agents like him. So to bring in additional money, Letham also works 40 hours every week at the local youth correctional facility as a guard.

"What's difficult about Harney County is, one, it's very rural," he said. "The other thing is there's no major employer here."

The brightspots

The remaining sources of strength in the Harney County economy can find themselves at odds: government agencies and cattle ranching.

The public sector is doing well, with employment down just 5 percent from before the recession while the private sector remains 23 percent smaller. Government cuts were largely local; federal employment has held steady at 250 jobs over the decade.

"It's not so much that the government is so large," said Lehner, the state economist. "It's because the private sector has declined so much since the 1970s."

In the wake of timber and manufacturing's decline, ranching has emerged as the central private sector player in the county. And ranching has enjoyed a growth spurt recently.

"It's agriculture that has kept this community here," said Rusty Inglis, who raises cattle and leads the county Farm Bureau.

Inglis said rising beef prices have equated to a three-year streak of very good years for the ranch economy. Harney County was the state's No. 2 beef producer in 2013, statistics from the Oregon State University Extension Service show, and livestock and hay sales brought in a combined $95 million in 2013.

Locals are fiercely protective of farming because agricultural profits circulate through the rest of the economy. When the livestock industry suffers, many people feel the whole county takes a hit. A federal survey in 2012 found 840 people helped run Harney County farms.

"If we lose agriculture, there's not going to be anything left except for federal jobs," said Inglis, a former federal worker himself.

Ranchers and federal officials must work closely together in Harney County, where three-quarters of land is publicly owned. Ranchers obtain grazing permits to run their cattle on public land, and in exchange must abide by rules that balance commercial use with other land functions such as recreation and habitat.

Dan Nichols, a Harney County commissioner who describes the relationship between federal land managers and ranchers as a business partnership, said some federal regulations on the land "have had dire effects on our communities, businesses and farms."

Land use regulations aimed at protecting a bird known as the sage grouse have restricted grazing, and an ongoing push to turn 2.5 million acres along Oregon's eastern border into a national monument could further reduce the space available to cattle.

"It's just a continual cinching of the rope," said Jason Ward, 33, an irrigation equipment worker who grew up in Burns.

The plight of two ranchers that led to the current occupation of the wildlife refuge are a prime example for many locals.

Steven and Dwight Hammond Jr. are serving out five-year arson sentences for lighting fires that burned federal land. Many believe the men got an unfairly harsh sentence given their stated intent: in one case, to remove invasive juniper and in another to keep a wildfire from spreading onto their ranch.

"They're good, law-abiding citizens who burned less than 140 acres of grass," said Erin Maupin, a Riley rancher and friend of the Hammond family. "I don't support armed standoff, but the core of all this is the frustration we all feel."

This post has been modified to clarify language regarding the conservation measures affecting Oregon's timber industry and to make clear what is known about Steven and Dwight Hammond's defense in their criminal case.